Representative actions: better rights for consumers
The European Union wishes to safeguard consumer rights and improve the enforcement of legislation protecting consumers across EU.
The Finnish Presidency will lead the negotiations on a directive setting up a new European legal remedy known as a representative action. The aim is to strengthen consumer rights. Representative actions provide an opportunity to sue collectively for damages on behalf of a group of consumers without needing to involve the consumers themselves as parties to the proceedings.
Acting on behalf of a group of consumers
The purpose of the Directive on representative actions is to promote the enjoyment of consumer rights. The idea is to increase the consumer’s chances to receive compensation for losses suffered as a result of infringements by traders of consumer rights legislation.
As a practical example, if certain conditions are met, a consumer organisation could bring suit on behalf of a group of consumers to avoid a situation where each consumer would have to act individually in their own interest.
This would enable consumer organisations or other “qualified entities” not only to apply for an injunction against a trader, which is already possible, but also to seek compensation for a defect or to oblige the infringing trader to repair or replace the defective product. The representative would be authorised to represent consumers in court or to act on their behalf in dealings with the authorities enforcing consumer rights. This kind of collective action would strengthen the rights of consumers, particularly in situations where the same product or service has caused harm to a large group of consumers.
There are currently major differences between member states with respect to access to class actions or other forms of collective redress. Some countries do not recognise any kind of collective action.
The directive also contains provisions aimed at preventing unfounded or unjustified actions.
Empowering consumers and strengthening the Single Market
The Directive on representative actions is part of the Commission’s “New Deal for Consumers”. Its aim is to ensure that all European consumers fully benefit from their rights under Union law. The Commission adopted its proposal for a directive on representative actions on 11 April 2018.
Maarit Leppänen, Ministry of Justice, Senior Ministerial Adviser, Legislative Affairs, tel. +358 295 150 276, maarit.leppanen(at)om.fi